The textile and garment sector is recovering in Vietnam

After an unprecedented wave of layoffs, the sector recovered rapidly in the previous quarter by abandoning its “zero-covid” policy.

Vietnam, along with Cambodia, Bangladesh, and more recently Burma, is a major supplier of clothing and textiles to the European Union (and generally Western European countries). The economy was one of the best performing in 2020 (2.9% growth). Production is increasing as China has wanted to upgrade production for the past decade. Nike, New Balance, Puma, Adidas and others rely on this Southeast Asian country for much of their production. However, the pandemic began with strict confinement in the Ho Chi Minh area, with the military serving food, and was subject to new workshops in the world.

The trauma of 1.3 million migrant workers who came from the countryside and returned to their hometown from July to September. The country has certainly experienced a pandemic with the delta mutant that has caused a surge in infectious diseases since last summer. The epidemic bounced back in early November. On November 29, VnExpress International, the English version of Vietnam’s leading news website, sounded a warning. An application in the protracted fear of Covid-19.

Same level as before the pandemic

In November, Nike’s subcontractors offered employees a $ 100 monthly bonus (a quarter of their salary), and New Balance suppliers promised free transportation to people returning to Ho Chi Minh City. I reported that. Hwang Ti Tan, vice chairman of the Vietnam Leather, Footwear and Handbags Association, recently told Reuters that many Christmas orders from abroad will not be fulfilled. However, Le Courrier du Vietnam now claims that the sector is recovering. In particular, the government has abandoned its “zero-covid” policy and relaxed measures to prevent and control epidemics.

Vinatex’s general manager, Cao Huu Hiêu, told Courrier du Vietnam in October that 90% of the employees of the group’s companies had already returned to work. Currently, almost 100% of the Group’s employees are in the company. “The high growth rate in the fourth quarter allowed the textile and garment industry to reach its annual export target of US $ 39 billion, an increase of almost 12% compared to 2020. Already in this sector. Growth is back on track.-Coronavirus levels. Exports to the EU increased 14% to $ 3.7 billion.

Good numbers are explained by strategic choices. The high profits are due in particular to the choice of factory managers who prioritize the yarn industry, which has risen from 20% to 50-55% of total production. However, there remains concern that logistics costs are four to five times higher than before the pandemic. Other challenges include a shortage of empty containers, transportation congestion that forces companies to deliver goods by air, and fluctuations in major export markets. The sector is targeting export sales of $ 38-39 billion in the worst-case scenario and $ 42-43 billion in the best-case scenario.

This article was originally published on FashionUnited.FR and translated and edited into English by Kelly Press.

The textile and garment sector is recovering in Vietnam

Source link The textile and garment sector is recovering in Vietnam

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